The Right Revenge for Redevelopment's End

In the wake of the California Supreme Court ruling that effectively eliminates local redevelopment agencies, such agencies and their cities are talking about pressuring the legislature to preserve redevelopment and its funding.

They shouldn't. Such a push is likely a waste of time, given Gov. Jerry Brown's principled -- and correct -- opposition to such agencies. And even if they were to preserve some funding, the agencies have no long-term chance of surviving as constituted in budget times as bad as these. The state, and the schools, would keep coming for the money, as they should.

Here's a better approach for cities and redevelopment: use this moment -- and the news of the redevelopment agencies' demise -- to demand greater rights for local governments to raise their own revenues.

What does that mean? What distinguishes California as a state is that local elected officials have little power to set tax rates. The constitution leaves that power to the legislature and to local voters (who must approve hikes by supermajorities). With their options limited, local officials have developed workarounds -- like the redevelopment agencies -- so that they have more control over their own destinies.

With the redevelopment option blocked, cities will be tempted to try to design a new workaround, perhaps with the help of the legislature. The smarter move, however, would be to launch a long-term campaign to return the power to set tax rates to local officials.

Yes, that's a game-changer. And yes, that would change one provision of Prop 13. But the policy is right, and the strange politics of 2012 offer an opportunity. Gov. Jerry Brown and the Democrats are desperate to pass tax initiatives. But to do so, they'll need support from local elected officials -- for political cover and because the money from Brown's tax initiatives is supposed to go to local governments. By the same token, Republicans want pension reform and a new spending limit, and will have trouble getting them if local governments oppose the measure.

Locals should leverage Democrats' need for support for the tax initiatives -- and Republicans' desire for pension reform and spending changes -- to demand more flexibility to set tax rates themselves. The specifics of such a change would involve everything from tweaks of existing laws to the possibility of a future ballot measure or a constitutional revision process. If Brown and Democrats balk, then the local governments should threaten to oppose -- loudly -- the tax initiatives, and to continue to use the courts to frustrate state budget-balancing efforts.

If they don't seize this moment, local governments are likely to see more of the same: a state that tries to solve its budget problems by dumping them with more responsibility, while refusing to provide the revenue-raise power to meet those responsibilities.

Let us know what you think. Comment below, send us your thoughts via Twitter @PropZero or add your comment to our Facebook page.

Contact Us